MPs now want State agencies to explain why a firm Parliament blacklisted in 2013 was allowed to import duty-free sugar.
The joint team investigating contraband sugar yesterday expressed shock that Mombasa-based Hydery (P) Limited was allowed to import 35,000 metric tonnes of sugar despite being blacklisted by Parliament in 2013.
Agriculture Committee of the eleventh Parliament blacklisted the firm after it was established that it imported 3,000 metric tonnes of sugar without a permit.
Other controversies
The firm has previously also been caught up in controversial cement and fertiliser imports.
Yesterday, Moiben MP Siles Tiren also queried why the firm was handed a three-year contract to supply fertiliser, against procurement laws that limit contracts to one year.
The fresh details emerged when Hydery (P) Limited Managing Director Naushad A. Merali appeared before the committee alongside Mohamed Kalyan (general manager) and Daniel Kihiko (legal officer).
The team co-chaired by Kanini Kega (Kieni) and Mandera South MP Adan Haji said it will task the Ministry of Agriculture, National Treasury as well as Agriculture and Food Authority (AFA) to explain the anomaly.
“It is the agencies we need to go to for allowing the firm to continue importing sugar despite the blacklist, not the witness (Merali),” said Kega.
Busia Woman Representative Florence Mutua said she was a member of the committee when some officials of the company were summoned over the matter.
She said Hydery (P) Limited and Stuntwave companies had their licences revoked in a report titled “The Crisis Facing the Sugar in Kenya”.
2015 report
“The committee also observed that in 2013/2014, KRA allowed into the country 15140.40 metric tonnes without permits from Kenya Sugar Board. The companies are Hydrey (3,000 metric tonnes), Krish Commodities Ltd, Reeswood Enterprises Ltd (4000MT), Shake Distributors Ltd (6,000MT) and Shree Sai Industries Ltd (1000MT),” reads the 2015 report.
There was a recommendation that their licences were to be cancelled.
The officials of the firm, however, told the committee that they unaware of the recommendation and have been importing sugar since 2000.
Merali blamed Treasury Cabinet Secretary Henry Rotich over his decision to grant duty-free importation of the commodity, describing it as rushed process that has negative implications to the local industry.
“We were baffled by the Government to allow duty-free sugar,” said Merali, who explained that Comesa sugar which he has been importing was going for US$250 per tonne, higher than US$750 per tonne for non-Comesa sugar.
He said he was forced to also import non-Comesa sugar to bridge losses he incurred in importing Comesa sugar.
At the same time, Kwisero MP Aseka Wangaya has filed a motion in Parliament seeking to suspend importation of sugar as it was hurting the local industry.
Comesa region
“I am deeply concerned that subsidies granted in favour of the importation of sugar from the Comesa region have been utilised to import sugar that is not certified as fit for human consumption from country of production, and further are directly threatening the small and medium scale production of sugar in Kenya,” said Aseka.
He wants the House to push the Government to invoke Article 98 of the treaty to “prohibit the importation of sugar that is considered illegal from its country of origin or within a Comesa State."
The MP also wants the Government to gazette temporary ban on all importation of sugar and suspend all subsidies in favour of importation of sugar immediately.
